Friday, August 13, 2010

Links for 8/13/10

The relationship between years of schooling and economic output at the national level is complex, to say the least. A small but consistently positive relationship between long-term growth and years of schooling is found in econometric studies, but there are many caveats and exceptions that are relevant to designing higher education policy in the U.S. For one thing there is tremendous variability in the relationship. For example, Germany has a stronger economy than France but half the percentage of young adults with a college degree. Further, France has increased its percentage of young adults with college degrees by 13 percentage points in the last 10 years whereas Germany’s output of college graduates has hardly budged, yet the economic growth rate of Germany has exceeded that of France over this same period. Obviously increasing educational attainment is not a magic bullet for economic growth…

A growing body of research suggests that policymakers should pay more attention to the link between job opportunities and what people know and can do, rather than focusing on the blunt instrument of years of schooling or degrees obtained…

Right now, people are still borrowing heavily to pay the steadily increasing tuitions levied by higher education. But that borrowing is based on the expectation that students will earn enough to pay off their loans with a portion of the extra income their educations generate. Once people doubt that, the bubble will burst.

So my advice to students faced with choosing colleges (and graduate schools, and law schools) this coming year is simple: Don’t go to colleges or schools that will require you to borrow a lot of money to attend. There’s a good chance you’ll find yourself deep in debt to no purpose. And maybe you should rethink college entirely…

The American higher education system in 2010 is such that everyone in a position to raise tuition has a good reason to do so, and nobody has a good reason to lower it. Thus, it gets raised a lot, and hardly ever lowered. If that doesn’t change, tuition will keep rising...